US homebuilder sentiment swells in August/Real estate rebound? Existing-home sales inch upward in Chicago region

US homebuilder sentiment swells in August
By Alan Rappeport in New York
Copyright The Financial Times Limited 2009
Published: August 17 2009 18:04 | Last updated: August 17 2009 18:04
http://www.ft.com/cms/s/0/0f698990-8b48-11de-9f50-00144feabdc0.html


US homebuilder confidence rose to its highest level since last June this month and has more than doubled since the start of the year, as hopes for a housing market recovery remain undeterred by record rates of foreclosure.

The National Association of Home Builders’ index of homebuilder sentiment rose from 17 to 18 in August, in line with economists’ expectations. The figure remains 75 per cent below the peak of hopefulness reached in June 2005 when the index rose to 72. A reading of more than 50 indicates “good” conditions.

“Homebuilder expectations have been buoyed by the success of the first-time home buyer tax credit and its anticipated boost to buying activity leading up to the November 30 expiration date,” said Joe Robson, NAHB chairman. “The question is what happens after that.”

Sentiment improved in the northeast, west and midwest, but slipped in the south.

Much of the increase in sentiment was focused on expectations for the next six months, signalling greater optimism that an economic recovery has begun, noted David Crowe, NAHB’s chief economist. The expectations sub-index jumped by 4 points in August and the prospective buyer traffic measure was up by 3 points.

“There is definitely a sense of hope among builders that the worst of the downturn is over and that a turning point is near,” Mr Crowe said.

Builder sentiment has been lifted by recent signs of life in the US housing sector. Last month the closely watched Case-Shiller index showed that US house prices had their first monthly gain in three years in May and in June new home sales in the US jumped by 11 per cent, the sharpest monthly rise in nearly nine years.

However, the stricken US housing market remains in a fragile state as it wrestles with a recovery. Last week RealtyTrac reported that foreclosure activity in the US hit a new record in July, while the National Association of Realtors reported that an increase in foreclosure sales led to a record 15.6 per cent decline in median home values to $174,100 in the second quarter from the year before.

The NAHB recommended that the US government extend its first-time home buyer tax credit and continued to press for improvements to the home appraisal process, which it blames for depressing prices. The group has warned that the severe credit crunch for housing production loans and inappropriate appraisal practices that are scuttling a quarter of all new-home sales continue to be “headwinds” that could slow the recent positive momentum.





Real estate rebound? Existing-home sales inch upward in Chicago region
July's small year-over-year gain is the 1st in at least 2 years; housing prices still depressed
By Mary Ellen Podmolik
Copyright © 2009, Chicago Tribune
August 18, 2009
http://www.chicagotribune.com/classified/realestate/chi-tue-home-sales-0818aug18,0,6634318.story


July sales of existing homes in the Chicago region posted the first year-over-year gain in at least two years, a sign that the local housing market may have, from a sales volume standpoint, bottomed out.

The same cannot be said of prices, which, while showing improvement on a monthly basis, remain far below year-ago levels.

There were 7,828 homes sold during July in an area that includes much of northern Illinois and parts of southern Wisconsin and northwest Indiana, according to Midwest Real Estate Data LLC, the local provider of real estate data to the industry. That compares with 7,642 sales the previous month and 7,752 sales in July 2008.

That's an improvement of only 76 homes from a year earlier, but in the current economic environment, the housing industry welcomes any gain it can get.

The median sales price of $208,700 in July compared with $205,000 in June. However, the median sales price of a home in July 2008 was $249,000.

Many of the purchases are thought to have been made by investors capitalizing on the large number of distressed properties on the market and by first-time buyers taking advantage of the $8,000 federal tax credit that expires Dec. 1.

Some 37 percent of local properties sold last month were either foreclosures or short sales, Re/Max International Chairman Dave Liniger, said Monday while in Chicago.

"It appears we have bottomed out in the real estate problem here," Liniger said.

He added if Congress does not extend the tax credit, as the housing industry has called for, there will be panic buying of properties in October in order to secure the credit, and then the real estate market will again drop.

Sales of existing homes statewide and the Chicago area, as reported by the Illinois Association of Realtors, are scheduled to be released Friday.

mepodmolik@tribune.com